So far, only 28,000 homes insulated through the project have been rentals, according to the Citizens Advice Bureau (CAB).
Ms Ruru said some Hawke's Bay tenants were reluctant to broach the subject of insulation with landlords "because they think their rent might go up another $50-$60 each week".
Under the project, 33 per cent of ceiling and floor insulation costs - up to $1300 - was provided to owners whose homes were built before 2000.
Community service cardholders and landlords with tenants who were community service cardholders qualified for 60 per cent of funding towards insulation.
Desperate tenants had even resorted to registering with Housing NZ in the hope of moving into a warmer home, Ms Ruru said.
Most community housing was insulated so people fed up with renting cold homes saw it as a better option, she said.
Andrew Hubbard, CAB national research and policy adviser, said too many Kiwis fell ill due to cold, damp or mouldy living conditions.
Those who suffered the most were families with babies or small children, he said.
"We need to urgently implement minimum standards for heating, insulation and weather tightness to ensure a decent standard of housing for all New Zealanders."
An expert group on child poverty, appointed by Children's Commissioner Dr Russell Wills, has also advocated for a housing warrant of fitness scheme.
Research showing high rates of poverty-related child illnesses such as respiratory-related infections could be reduced by making houses drier and warmer prompted the group to identify a minimum housing standards scheme as one of its six "immediate priorities".
But the umbrella body for property investors has warned such a scheme could result in higher rents.
Andrew King, president of the New Zealand Property Investors Federation, said many landlords found the Government's subsidised insulation scheme too expensive.
For example, a standard three bedroom home would cost about $3000 to insulate through the Heat Smart scheme, after the $1300 subsidy, he said.
Landlords could do it themselves for about half the price, Mr King said.
"The housing warrant of fitness is definitely going to increase rents and we just don't believe it's in the best interest of the tenants."
Regulation around insulation and heating would be a better alternative, he suggested.
-APNZ